United States District Court, E.D. Pennsylvania
ALLA PASTERNACK, Executrix of the Estate of Leon Frenkel, Plaintiff,
BRUCE K. KLEIN, Defendants.
to a partial settlement entered on the record, Bruce K. Klein
agreed to pay $50, 000 to Leon Frenkel in satisfaction of two
outstanding contracts. The executed Settlement Agreement (the
“Agreement”) required payment by February 9,
2017-a deadline that Klein missed. The Court then ordered
Klein to comply with the Agreement by April 14, 2017-a
deadline that Klein missed. To date, Klein has failed to make
a contempt hearing held on April 27, 2017, the Court finds
that Klein is in civil contempt of court. Klein is ordered to
comply with the Settlement Agreement by 11:59 PM EDT on
Friday, April 28, 2017. For every subsequent day that Klein
fails to comply with the Settlement Agreement, he shall pay
fine of $250 per day to the Eastern District of Pennsylvania.
The fines will continue until he complies with the Agreement.
Continued failure to comply with the Court's Orders may
result in additional sanctions, including incarceration.
action is the latest episode in this multi-year contract
dispute. In April 2014, Frenkel sued Klein and Victory
Partners, LLC for breach of four contracts signed in 2010 and
2011. (Compl.) After nearly three years of procedural
runaround, the parties went to trial on Monday, January 9,
2017. The morning of trial, Frenkel and Klein announced on
the record that they had settled two of the four disputed
contracts for $50, 000. (Tr. 6-8.) They agreed that Klein
would provide Frenkel with a release by Wednesday, January
11, 2017, and that Klein would remit payment to Frenkel 15
days later, by January 26, 2017. (Id.)
and Klein subsequently memorialized the settlement in a
Settlement Agreement, which stated that the $50, 000 would be
paid within 15 days of the execution of the Agreement.
(Pl.'s Mem. Law Supp. Mot. Enforce Settlement Agreement
1-2.) Frenkel executed the Agreement on January 20, and Klein
executed the Agreement on January 25. (Id.) Pursuant
to the Settlement Agreement, Klein was therefore required to
remit payment by February 9-a deadline he failed to meet.
February 14, Frenkel filed a motion to enforce the Settlement
Agreement, requesting that the Court order Klein to comply.
(Id.) The motion also requested an award of
attorney's fees as a sanction. (Id.) Seventeen
days later, Klein filed a response, conceding that the
Agreement was enforceable and that he was obligated to pay
the $50, 000 settlement. (Def.'s Resp. Mot. Enforce
Settlement 1-2.) Klein claimed that he was working diligently
to arrange payment, and would be able to pay Frenkel by
Friday, March 10. (Id.) Klein also offered to pay
Frenkel an additional $1, 000 to compensate Frenkel for the
inconvenience, attorney's fees, and costs. (Id.)
passed away one day later, on March 4. One month later, the
Court granted a motion to substitute Frenkel's daughter
and executrix, Alla Pasternack, as plaintiff. Pasternack
subsequently informed the Court that she had not received
either the required $50, 000 or the promised additional $1,
000 from Klein. On April 11, the Court granted
Pasternack's motion to enforce the Settlement Agreement
and ordered Klein to remit payment to Pasternack by April
14-another deadline he failed to meet.
Court held a contempt hearing on April 27, during which Klein
testified under oath to his present inability to pay
Pasternack the $50, 000 owed under the Settlement Agreement.
Klein testified that he earned roughly $3, 000 a month, and
had been living off of a $15, 000 death benefit received at
the end of December 2016. He testified that he had
anticipated receiving $97, 000 in late January as
compensation for consulting work, but had not yet received
the money. Klein provided no additional evidence of his
current assets and income, or lack thereof, and claimed that
he had no personal bank account. Finding the contempt
standard satisfied, the Court held Klein in contempt.
contempt sanctions are nonpunitive, avoidable penalties
“designed to compel future compliance with a court
order.” Int'l Union, United Mine Workers of Am.
v. Bagwell, 512 U.S. 821, 827 (1994). These sanctions
serve two purposes: “one coercive and the other
compensatory.” Harris v. City of Phila., 47
F.3d 1311, 1328 (3d Cir. 1995) (citing Bagwell, 512
U.S. 828-829). Coercive sanctions aim “to coerce the
defendant into compliance with the court's order.”
Robin Woods Inc. v. Woods, 28 F.3d 396, 400 (3d Cir.
1994) (internal quotation marks omitted). Compensatory
sanctions “make reparation to the injured party and
restore the parties to the position they would have held had
the injunction been obeyed.” Id. (internal
quotation marks omitted).
contempt “is a ‘severe remedy, and should not be
resorted to where there is fair ground of doubt as to the
wrongfulness of the defendant's conduct.'”
First Niagara Risk Mgmt., Inc. v. Kolongowski, Civ.
A. No. 16-0719, 2017 WL 660855, at *5 (E.D. Pa. Feb. 17,
2017) (quoting Cal. Artificial Stone Paving Co. v.
Molitor, 113 U.S. 609, 618 (1885)). Due process requires
“notice and a hearing before a finding of contempt is
made and before the imposition of contempt sanctions so that
the parties have an opportunity to explain the conduct deemed
deficient and that a record will be available to facilitate
appellate review.” Harris, 47 F.3d at 1322
(internal quotation marks and ellipses omitted).
a party in civil contempt, “the court must find that
(1) a valid court order existed, (2) the defendant had
knowledge of the order, and (3) the defendant disobeyed the
order.” Id. at 1326. These elements must be
supported with “clear and convincing evidence, ”
and the court must resolve any ambiguities in favor of the
party charged with contempt. Id. at 1321, 1326.
“[W]illfulness is not a necessary element of civil
contempt, ” and good faith is not a defense. Robin
Woods Inc., 28 F.3d at 399 (internal quotation marks
district court judge “may impose a wide range of
sanctions” for civil contempt. Int'l Plastics
& Equip. Corp. v. Taylor's Indus. Servs., LLC,
Civ. A. No. 07-1053, 2011 WL 1399081, at *5 (W.D. Pa. Apr.
12, 2011). The judge may impose a fine intended to coerce the
contemnor into compliance (paid to the court) or to
compensate the complainant for losses sustained (paid to the
complainant), id. at *5-*6; see Shulman v.
Chromatex, Inc., Civ. A. No. 08-0229, 2012 WL 3289006,
at *3 (M.D. Pa. Aug. 10, 2012). The judge may also jail an
individual found in contempt of court, provided that the